New medical debt collection law protects consumers

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The legislatures of Nevada and New Mexico recently enacted new laws that address medical bill information and collection practices. The measures entered into force in July. How the Nevada Law affect debt collectors, hospitals and patients? Does it sufficiently protect consumers? And does it compare favorably to other states? Read on.

Indigent Nevada patients who owe money are excluded from collection actions. That is, extreme collection measures, such as legal action, cannot be taken against people with incomes below 200% of the poverty line. In addition, healthcare facilities and third-party providers must send an annual report of the financial details of the medical care of indigent patients to the state’s department of social services for review. Overall, the law removes the generally high cost of providing medical care to indigent patients if they are unable to pay.

The new law also requires health care facilities to verify if a patient has health insurance before billing, and to provide proof of this verification in the billing statement. If a patient is uninsured, the facility should provide the patient with information about available insurance. If there is a possibility of financial assistance, either through public assistance programs or the institution itself, this should also be brought to the attention of the patient. Finally, if a patient wishes to enroll in a public program or insurance, the facility is required to assist them in the application process.

It doesn’t stop there. Billing statements should contain information, including the date the medical care was administered, the nature of the care, and the amount associated with it. This policy ensures that patients understand exactly what they are being charged for.

The law also requires that within 30 days of receipt of payment, the healthcare provider, debt collector, third-party healthcare provider or creditor acknowledge receipt of payment and send proof of payment to the payer. This statement must include account details, amount paid, date payment received and new balance, as well as any interest rate applied and interest current or accrued since the last payment.

New Mexico’s new law also sought to prevent health care providers from sending medical bills to collections or suing for medical debts for people with household income of 200% or less. federal poverty line, among others. The requirements of this bill include many of the same guidelines as Nevada law, including that charges for health services and medical debts for needy people cannot be pursued through collection actions. He also says collection actions that violate the law can and will be terminated as soon as a patient is determined to be a patient in need. Health care facilities in New Mexico should also offer to verify and, upon request, verify if a patient has health insurance, and offer uninsured patients information about insurance or public assistance. Upon request, as in Nevada, health care providers must assist with the program application process.

In Utah, for comparison, the recent Health Care Debt Collection Amendment (HB128) sets out some basic criteria that collectors must meet before making any movement, including the fact that collectors must give debtors a reasonable time after notification of late payment and before any collection action. Health care providers and billers must give patients 45 days after a debt notice to pay off the debt; Medicare beneficiaries must have 60 days. The notice is mandated to include transparent information about the nature and amount of the patient’s debt, and a warning to report if the patient does not pay. (Medical debt in Utah has a six-year statute of limitations, and creditors and collection agencies cannot distort their ability to sue. Utah patients even have the right to ask vendors, creditors and collection agencies if their medical debt complies with statute of limitations, and creditors are required by law to respond honestly.)

These new laws aim to better inform patients and protect clients from abusive and oppressive debt collection techniques. In my opinion, Nevada’s new medical debt collection bill adequately protects the rights and interests of consumers.

Lyle Solomon is the lead counsel for the Oak View Legal Group in California. He is a graduate of the McGeorge School of Law at the University of the Pacific at Sacramento and has written articles for various publications including Entrepreneur and Business Insider..


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